Bloomberg reports that the ratio of ratings downgrades to upgrades globally was 1.85, up from 1.23 last year. The story uses Radioshack (RSH) as a poster child for what’s been happening; the retailer has seen its ratings cut four levels by S&P this year.

What seems to be worrying the ratings agencies is the slowing global growth coupled with more companies issuing debt to take advantage of low rates, often even if they don’t need it:

“Companies are borrowing more for general corporate purposes and they may make an acquisition, they may sit on the cash,” Sabur Moini, who manages about $2.5 billion of high- yield assets at Payden & Rygel in Los Angeles, said in a telephone interview. “Those are the kinds of things that concern” ratings companies, he said, “when companies are just raising cash and it’s sort of unclear what they’re going to do with the cash.”

The story also notes that (no surprises here) the low rate environment is sending bond buyers into the kind of places where they perhaps ordinarily wouldn’t go:

Investors are taking on more risk by buying junk bonds that have lower covenant quality, according to Moody’s. Sales of so- called pay-in-kind toggle notes, securities that allow the borrower to make interest payments with more debt instead of cash, reached $4.9 billion this year, the most since $6.5 billion in 2007, according to data compiled by Bloomberg.

“You are seeing more aggressive deal structures,” Moini said. “Investors want yield and even if it’s a PIK toggle, CCC deal at 9 percent, there are buyers for that.”

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